Harden v. North Carolina Railroad

Clare, J.

Tbe plaintiff was a brakeman in tbe service of tbe Southern Railway Company (lessee of defendant), on a freight train, and was injured in making a coupling be- ■ tween a box-car and tbe shanty-car “with a link and tbe old-style draw-bead.” Tbe shanty-car was not equipped with automatic couplers, nor was tbe train fully equipped with Janney couplers, or other modem self-coupling devices, and tbe Court charged tbe jury, citing Greenlee v. Railroad, 122 N. C., 977, 65 Am. St. Rep., 734 — since followed in Troxler v. Railroad, 124 N. C., 189, 70 Am. St. Rep., 580, and otbe cases — as follows: “If you find that tbe freight train was not fuly provided with modern self-acting couplers, and that tbe plaintiff would not have been injured had the cars been so provided, you will find tbe first issue ‘Tes’ and tbe second issue ‘No.’ ” . Tbe Judge followed tbe decisions of this Court, and, without repeating tbe argument therein, it is sufficient to say that we re-affirm our former rulings bolding a railroad company responsible for injuries to its employees which would not have occurred if there bad been provided by it those humane devices protecting tbe lives and limbs of its employees, which are in general use. Tbe reports of tbe United States Intercommeree Commission, .issued by tbe authority of tbe Federal government, show tbe reduction of many thousands annually in tbe number of employees killed or maimed in coupling'cars since tbe introduction of'automatic couplers (which now is compulsory'under tbe act of Congress as to all interstate roads). This should *356 be a sufficient answer to all complaints as to our former rul.ing. If tbe lives and limbs of employees can be saVed by sucb provision of improved appliances, public policy and humanity require, tbe Courts to exact liability for failure to furnish them.

Tbe principal point made, however, is in the effort to induce this Court to overrule a still longer line of decisions which hold this lessor, the North Carolina Nailroad Company, liable for the act and defaults of its lessee, the Southern Hallway Company. The charter of the North Carolina Nailroad Company, Laws 1848-9, Chap. 82, sec. 19, authorize the company “to farm out its right of transportation over said railroad, subject to the rules above mentioned.” There are no other words from which a right to lease the road can be inferred. As at the date of the charter railroads were comparatively new, and the popular idea was that a railroad company was to maintain the road-bed and “farm out” rights of transportation over it, as was the case with canal companies, and is to-day the case with express companies and many “fast freight” and “through lines,” it was thought by many that these words did not authorize, and were not intended to authorize, alease of its entire property, which lease had the effect to take it out of a “State system” running from the mountains to the seacoast under State control, and make it a part of an interstate line running North and South, under the control of foreign corporations, to the utter destruction of the “State system” intended by the charter of the defendant. The authority to lease, based upon the permission “to farm out its rights of transportation,” came before this Court in State v. Railroad, 12 N. C., 634, and that expanded construction was sustained by a divided Court, Judge Settle writing the opinion, Judge Bynum dissenting in a remarkably able opinion. Judge Nodman did not sit. If it were a new question, this Court might possibly hold with Judge *357 Bynum as to the reasonable- construction of the meaning of tbe words “to farm out the right of transportation,” but the lessee' would rely upon the fact that it took its lease relying upon the construction placed by this Court upon the meaning of those words. But it also made its lease subsequent to the decision of this Court — -often since repeated — that those words did not allow the lessor to rid itself, by any lease made under authority conferred by those words, of liability for any acts or negligence or torts committed by the lessee as to the world, its passengers or its employees, the latter being held in effect to be simply sub-employees of the lessor, employed by its agent for the operation of the road, its lessee.

In Aycock v. Railroad, 89 N. C., 321 (1883), it had been held, Smith, O. J., the authorities “fully sustain the proposition that the defendant company leasing the use of its road or permitting the use of it by another company, remains liable for the consequences of the mismanagement of the train in charge of the servants of the latter and the injury thence resulting, to the same extent as.if such mismanagement was the act or neglect of its own servants operating its own train,” citing the authorities.

In Logan v. Railroad, 116 N. C., 940, this very charter of the defendant company was elaborately considered, and in an able opinion by Mr. Justice Avery, concurred in by the entire Court, it was held that no lease made by virtue of the above-cited words — there being no clause of exemption granted to the lessor — would exempt the defendant from liability for the wrongful acts, defaults or negligence of its lessee, and hence that the lessor company was liable for injuries sustained from the negligence of its lessee by a section hand employed by such lessee.

This decision was rendered by this Court at February Term, 1895, and the lessor and lessee, both aware of the construction placed by the Court upon a contract by lessor to *358 “farm out its right of transportation” on 16th August following executed the lease under which the lessee is now oper a-ting the defendant’s road. Both parties had that decision in view, and provided for the liability of the defendant for all the acts and defaults of its lessee by a stipulation in said lease (which lease is filed as a part of the record in this case) for a deposit of “not less than $175,000 in cash, or its equivalent, to be applied” to the performance of the stipulations in the contract to- be performed by the lessee, and among them “to any judgment or judgments recovered in any Court of the State or of the United States when finally adjudicated, for any tort, wrong, injury, negligence, default or contract, done, made or permitted by the parties of the second part, its successors, assigns, employees, agents or servants for which the party of the first part shall be adjudged liable, whether the party of the first part is sued jointly with or separately from the party of the second part,” and further provides to what agents of the lessee notices of such suits shall be given by the lessor when sued singly, and for \the renewal and maintenance of said sum whenever diminished by such application of any part thereof.

The lease was made subsequent to the decision of the Logan case. Both lessor and lessee knew of the continuing liability of lessor under any lease authorized by the words “farm out,” as construed by this Court, and stipulated, in view of such liability, a deposit being put up, to be maintained at a fixed sum to guarantee the lessor, the defendant herein. If the lease is valid because made subsequent to the decision of a divided Court in State v. Railroad, 72 N. C., 634, it does not lie in the mouth of the lessor to contend that it does not remain liable for all acts of its lessee in the operation of its road under a lease made subsequent to the decision of a unanimous Court in Logan v. Railroad, 116 N. C., 940, especially when it has stipulated against loss therefrom by exacting *359 a deposit from its lessee. And, in fact, tbe lessor bas not complained. This objection has several times been raised in this Court, but always by counsel of the lessee, and ruled upon again and again, always in conformity to the precedents in Aycock’s case, 89 N. C., 321, and Logan’s case, supra. The defendant' has never averred any loss, detriment or probable damage by reason of its being held liable for the acts of its lessee as its agent in the operation of the road. The lessee, the Southern Railway Company, is the only railroad company operating in this State which claims to be a foreign corporation, as we know from the statutes incorporating all others, except possibly one other lessee. It has been stated by its counsel in their place here that the Southern Railway Company has- “domesticated” — but it is unnecessary to discuss here the point which has been decided in Debnam v. Tel. Co., 126 N. C., 831. Whether the lessee be a foreign corporation or not, the lessor when it entered into this lease, knew that by the terms of its charter, as construed by this Court, it would remain liable, notwithstanding such lease, for the acts of its lessee. Logan v. Railroad, supra, has been cited and approved on this point, Tillett v. Railroad, 118 N. C., at page 1043; James v. Railroad, 121 N. C., 528; Norton v. Railroad, 122 N. C., at page 931; Benton v. Railroad, Ibid, at page 1009; Pierce v. Railroad, 124 N. C., at page 93; Perry v. Railroad, 128 N. C., at page 473, and in Raleigh v. Railroad, at this term, in most of which cases this defendant was a party.

Had Logan’s case not be.en decided prior to the lease made by the lessor, and stipulations in view thereof made in the lease-, and viewed as an original question, it is sustained by the overwhelming weight of authority and upon reason. In 20 Am. and Eng. R. R. Cases Annotated, at page 841, the rule is laid down: “A railroad company which has leased its road, cars and engines,'and allows the lessee company to *360 operate tbe same, is liable to third persons or tbe public for tbe carelessness and negligence of tbe lessee, and for defects in tbe construction and maintenance of tbe road and its equipments, unless there is a statutory provision to tbe contrary” (and there is none in this case). Eor this propo-' sition- it there cites thirty-six cases from tbe United States Courts and tbe Courts of tbe different States, and from England, and it is not necessary to repeat them here. In Railroad v. Brown, 84 U. S., at page 450, tbe Court says: “It is tbe accepted doctrine in this country that a railroad corporation can not escape tbe performance of any duty or obligation imposed by its charter or tbe general laws of tbe State by a voluntary surrender of its road into tbe bands of lessees. Tbe operation of tbe road by tbe lessees does not change the relations of tbe original company to tbe public,” and cites with approval 1 Redf. Railways, to same effect. Also to tbe same purport are 1 Beach Pr. Corp., sec. 366; 1 Spelling Pr. Corp., 135, and several other authorities cited in Logan v. Railroad, 116 N. C., at pages 946 et seq.

In Harmon v. Railroad, 28 S. C., 401, tbe words of tbe charter construed were almost identical with those in defendant’s charter, and it was held that a lease made thereunder did not relieve tbe lessor from liability for tbe acts of its lessee. In Bank v. Railroad, 25 S. C., 216, tbe same ruling is made as to non-delivery of freight, the Court saying: “We are unable to appreciate tbe distinction attempted to be drawn by appellant’s counsel between tbe liability of a railroad company which has leased its line to another, to actions ex delicto and ex contractu. Tbe foundation for such liability is that such company, by accepting its charter, assumed obligations to tbe community from which it can not absolve itself by leasing its road to another company; and as such carrier is not only under an obligation to carry passengers safely, but also to deliver goods entrusted to it for trans *361 portation, we think the same principle Avhich would make the lessor liable in the one case would make it liable in the other.”

In Balsley v. Railroad, 119 Ill., 68, it is said that the. liabilty of the lessor for the acts of the lessee is not merely because the lessee is the agent of the lessor, but further because the lessor in consideration of the grant of its charter undertook the performance of duties and obligations, and it is against public policy for it to be relieved therefrom without the express consent of the Legislature.

In 20 Am. and Eng. E. Cases, at page 848, it is said: “A railroad company which leases its road pursuant to a statutory authority, which does not contain any provision releasing it from the performance of its duties to the public, is liable for personal injuries sustained through negligence in the operation of the road by the lessee. To the same purport are:

United States. — Thomas v. Railroad, 101 U. S., 83; R. Co. v. Brown, 84 U. S., 445; R. Co. v. Barron, 72 U. S., 90; R. Co. v. Winans, 58 U. S., 39.

Georgia. — Singleton v. Railroad, 70 Ga., 464, 48 Am. Rep., 574; Railroad v. Moyes, 49 Ga., 355.

Illinois. — Railroad v. Dunbar, 20 Ill., 623; R. Co. v. Lane, 83 Ill., 448; Railroad v. Campbell, 86 Ill., 443; Railroad v. Peyton, 106 Ill., 534; Balsley v. Railroad, 119 Ill., 68, 59 Am. Rep., 185; R. Co. v. Meech, 163 Ill., 305.

Maine. — Whitney v. Railroad, 44 Me., 362; Stearns v. R. Co., 46 Me., 95; Nugent v. R. Co., 80 Me., 62.

Massachusetts. — Quested v. R. Co., 127 Mass., 204; Braslin v. R. Co., 145 Mass., 64 (where the contract of lease is much as in this case).

Missouri. — Brown v. R. Co., 21 Mo., App., 394.

Nebraska. — Charlotte v. R. Co., 26 Neb., 159.

New York. — Abbott v. R. Co., 80 N. Y., 21, 36 Am. Rep., 512.

*362 North Carolina. — Aycock v. Railroad, (1883) 89 N. C., 321; Logan v. R. Co., 116 N. C., 940; Tillett v. Railroad, 118 N. C., 1043; James v. R. Co., 121 N. C., 528; Norton v. R. Co., 122 N. C., 937; Benton v. R. Co., Ibid., 1009; Pierce v. R. Co., 124 N. C., 93; Perry v. R. Co., 128 N. C., 473; Raleigh v. R. Co., at this term.

Oregon. — Lakin v. R. Co., 13 Ore., 436, 57 Am. Rep., 25.

South Carolina. — Harmon v. R. Co., 28 S. C., 401; Hart v. R. Co., 33 S. C., 427; Bank v. R. Co., 25 S. C., 216.

Texas. — Railroad v. Underwood, 67 Tex., 589; Railroad v. Morris, Ibid, 692; Railroad v. Morris, 68 Tex., 49.

Washington. — Cogswell v. R. Co., 5 Wash., 46.

In 71 Am. Dec., 295, it is said by Judge Freeman in bis notes: “It is a well-settled doctrine that, in the absence of legislative authority permitting a lease and exempting the company from liability, it is responsible for the toils of the lessee” — citing many cases.

In Nelson v. R. Co., 26 Vt., 717, 62 Am. Dec., 614, Chief Justice Redfield says: “As to the liability of the defendants for the acts of their lessees, who were running the defendants’ road under a long lease, yve think there can be no doubt. Unless we can hold the defendants thus liable, they might put their road into the hands or corporations or individuals of no responsibility.”

• If a railroad corporation could relieve itself of liability by leasing, it would follow that leases could be made to another corporation with no tangible assets — as, indeed, the lessee in this case, if a foreign corporation, has none in this State — leaving the travellers and shippers over its line, the general public and its employees alike, without recourse on the property of the corporation which was chartered to operate the road, and which is left in- receipt of the rent, which might readily be made high enough to cover the profits. Thus *363 tbe company would, by a device of a lease, receive tbe profits without incurring tbe liabilities of its business.

In many cases it bas been held that a bona -fide mortgage can not bave tbat effect. Acker v. Railroad, 84 Va., 648; Naglee v. R. Co., 83 Va., 707; Railroad v. Burnett, 123 N. C., 210, and tbe rights of mortgagees for money presumably applied to debts are stronger than those of lessors.

■ Tbe question here is not tbe liability of lessees, which also exists, but of tbe right of tbe lessor to put off tbe liabilities incident to tbe franchise given it, while continuing to enjoy its profits through tbe medium of a lease. This tbe corporation owning tbe property can not do.

No Error.